Rule One of Business: Get Paid
To be paid, just as you would figure is vitally fundamental to your business because if you are not paid, why are you in business?
You would be astounded at the heaps of business people who only get their clients to make payment when and if they feel like it. I know of one businessman who continuously gets bad debts like charms. How is that possible? Probably because he can’t bring himself to request the payment and people can just take advantage of him.
If you let somebody credit, only do it when they have proved their worth to you by paying cash on delivery (COD) for some period of time. Furthermore, you must see whether they have the means to pay you - if not then you shouldn’t do business with them. Don’t fool yourself into the line of “I need the work” or “I need the sales”. It’s ultimately in doing the job or providing the goods for nada if you aren’t paid.
If you are the sort of person who can’t demand the payment even after the work has been finished, try these cheats:
Tell your customer that when the job is done with, you will need cash or cheque. They should likely have it ready at at the finish date and you do not have to ask for your pay.
When giving out a quote, make sure your payment terms are evident.
Complete an invoice with your terms of payment plainly printed and send the customer the invoice when the job is done. They will look at the invoice and immediately know they should pay you the money now without you going to say anything. Create a “cruel boss” who might skin you alive if you can not return with the fee for the job.
Ask your branch to set you up with Merchant facilities so you can take credit cards for example Mastercard and Visa. The majority of people have credit cards and it would stop the problem of the client not having a cheque account or not having the right cash in their pocket.
Otherwise, don’t be frightened to hold onto the goods until payment has been made. Understand, until the goods have been paid for, the goods remain yours.
If you choose to allow somebody credit, make sure you have got the following information off them a week BEFORE you allow them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
Once you possess all this detail, contact the banking institution and make sure that they do operate an account then. Then, telephone all of the trade reference and request if they pay their fees on time or if there have been any issues with them.
Most people will be willing to tell you if the person is troublesome. If everything is OK, allow them a moderate level of debt, say no more than $500 (depending on your business). Monitor the operation of the account for a few months before allowing this amount to be exceeded.
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